Wow, Arcus... no links, no supporting evidence. More repetition of your "over ten years" nonsense, which is funny because their error is more or less the same size as the deficit reduction plan, which is ALSO spread out over ten years. Funny, that.

Anyways, I'm done with you. I'm guessing that you've either bought into the fraud, or you're an active participant. Good day.

ImprobableJoe wrote:Wow, Arcus... no links, no supporting evidence. More repetition of your "over ten years" nonsense, which is funny because their error is more or less the same size as the deficit reduction plan, which is ALSO spread out over ten years. Funny, that.

Anyways, I'm done with you. I'm guessing that you've either bought into the fraud, or you're an active participant. Good day.

You should have the ability to find the current US GDP and a 10 year projection on your own. Then use addition to come up with a sum of this.. One of the reasons for the downgrade, assuming you have read the report is due to the deficit plan being insufficient. 2 trillion is peanuts in an economy as large as the American over a longer time frame. Note that the cumulative default rate for AA+ muni's, which are the most comparable to sovereigns, is still 0%. Also, the US isn't the first country which has faced harsh downgrades, it has happened to Japan a while back, and the PIIGS more recently. There have also been downgradings in the MENA region.

As a side note, I was shipped off to Cairo a month ago to negotiate security arrangements with the Egyptian government partly due to it's downgrading to Ba3 (OL-). It will be interesting to see on Monday if we are implementing any actions against US based companies. I am lucky enough to work for one of those rare remaining AAA rated companies and coming from the least risky country in the world which also has an external debt/capita 10 times higher than the US, or approximately $450.000 per person or over 500% of GDP.

ImprobableJoe wrote:This is a stupid argument anyway, since deficits aren't the problem in the first place.

Uhm? "OK" I guess..Isn't 5-6% of the US Fed Budget dedicated to only interest payments on government debt? That means that 10% of the budget should go towards debt management. In the national economy the absolute numbers are much higher. You are somewhat right, the real issue is the potential hyperinflation if the debt can't be rolled over. China is already diversifying itself away from US bonds and advocating an end to the dollar denominated currency regime currently in place. If the US is forced to repay in SDR it is - if you pardon the expression - royally fucked. If I was Obama I would declare war on China and immediately surrender unconditionally without a single shot fired.

The primary concern cited is "progress containing the growth in public spending, especially on entitlements".

Their primary concern is on the first page, Arthur.

"¢ The downgrade reflects our opinion that the fiscal consolidation planthat Congress and the Administration recently agreed to falls short ofwhat, in our view, would b"¢ More broadly, the downgrade reflects our view that the effectiveness,stability, and predictability of American policymaking and politicalinstitutions have weakened at a time of ongoing fiscal and economicchallenges to a degree more than we envisioned when we assigned anegative outlook to the rating on April 18, 2011."¢ Since then, we have changed our view of the difficulties in bridging thegulf between the political parties over fiscal policy, which makes uspessimistic about the capacity of Congress and the Administration to beable to leverage their agreement this week into a broader fiscalconsolidation plan that stabilizes the government's debt dynamics anytime soon.

They didn't like the very real possibility that we could default just because a gang of no-nothings got their panties in a bunch and therefore refused to raise the imaginary debt ceiling.

But the icing on the shitcake is what comes after the part you quoted.

We lowered our long-term rating on the U.S. because we believe that theprolonged controversy over raising the statutory debt ceiling and the relatedfiscal policy debate indicate that further near-term

ArthurWilborn wrote:progress containing the growth in public spending, especially on entitlements,

or on reaching anagreement on raising revenues is less likely than we previously assumed andwill remain a contentious and fitful process.

They like neither our spending nor our insane refusal to raise revenues, given equal mention in the same sentence, you bald-faced liar.

Standard & Poor's takes no position on the mix of spending and revenuemeasures that Congress and the Administration might conclude is appropriatefor putting the U.S.'s finances on a sustainable footing.

But I must reiterate, their REAL problem is the idiots in congress who think the debt ceiling is a political tool. Obama isn't without his own share of the blame either for his vote against raising Bush's ceiling, but at least his vote not to raise it was just an unimportant protest vote and not something with real legislative consequences.

"When I come to my own beliefs, I find myself quite unable to discern any purpose in the universe, and still more unable to wish to discern one." ~ Bertrand Russell"If we do not succeed, we run the risk of failure." ~ Dan Quayle

RichardMNixon wrote:They didn't like the very real possibility that we could default just because a gang of no-nothings got their panties in a bunch and therefore refused to raise the imaginary debt ceiling.

Deckchairs on the Titanic. The quibbling only matters with the background of impending disaster.

ArthurWilborn wrote:Deckchairs on the Titanic. The quibbling only matters with the background of impending disaster.

That's exactly the point. There was an impending disaster and rather than just avert it with a clean vote as we've done 70 some odd times in the past, Congress and the Tea Party in particular had to make a huge mess of it. That doesn't look good to an investor. Would you lend me money if I told you there was a real chance I would simply decide not to pay you because some people in my house didn't want to? S&P was saying as politely as the could that congress was an incompetent bunch of selfish children and that they no longer trust such children as completely with investments.

Their explanation was abundantly clear on this point. They don't trust us with money because we nearly refused to pay our debts over a stupid political debacle. Why else would they downgrade our credit now? It has little to do with our quantitative debt and everything to do with how we mange it - that is, the debt ceiling.

Yes, Arthur, good point. We should raise our tax rates to be more in line with the rest of the developed world.

Well, "liar" is a bit harsh, but I agree my characterization was off.

Would you prefer "quote-miner"?

"When I come to my own beliefs, I find myself quite unable to discern any purpose in the universe, and still more unable to wish to discern one." ~ Bertrand Russell"If we do not succeed, we run the risk of failure." ~ Dan Quayle

The Atlantic recently published a very good article:Washington and Wall Street Asked for S&P's Downgrade

"Okay Congress: You want us to be more aggressive with our ratings and not just stamp AAA on any old bond? Then how about this -- you're downgraded." This proclamation wasn't a part of Standard and Poor's statement on its decision to lower the U.S.'s sovereign debt rating from AAA to AA+ on Friday, but it could have been. The agencies have been taken a beating for their lack of leadership in risk assessment over the years, particularly for their failures during the housing bubble. So what happens when one of them finally takes a bold, contrarian stance? Washington and Wall Street are even angrier.

(...)

-----------------Apparently, the rating agencies now trust the French more than the Americans...